Custom, Excise & Service Tax Tribunal
Jai Balaji Industries Ltd vs C.C.E. & S.T.-Raipur on 19 December, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. I Appeal No. E/55894,55895,55896 & 55897/2013-EX [DB] [Arising out of the common Order-In-Original No.36-39/RPR/2012 Dated 03.12.2012 passed by Com. of Central Excise (Appeal-II) Central Excise Building, Tikrapara Dhamtari Road, Raipur-492001(C.G)] Jai Balaji Industries Ltd. Appellant Vs. C.C.E. & S.T.-Raipur Respondent
Appearance:
Sh. V.K. Puri, Ld. Advocate for the appellant Sh. R. K. Manjhi, Ld. AR for the respondent CORAM:
Honble Justice Mr. Dr. Satish Chandra, President Honble Mr. Ashok K. Arya, Member (Technical) Date of Hearing.23.11.2016 Date of decision.19.12.2016 Final Order No.55895-55898/2016 Per Ashok K. Arya:
1. The appellant, Jai Balaji Industries Ltd. has filed these four appeals against common order in appeal dated 03.12.2012 passed by Commissioner (Appeals-1) , Raipur (C.G.) whereunder the exemption benefit under Notification No. 67/95 CE 06.03.1995 has been denied on the item Dolochar captively consumed by the appellant for production of electricity.
2. The appellant has been represented by the Ld. Advocate, Sh.V.K Puri and Revenue has been represented Ld. AR, Sh. R.K. Manjhi.
3. The ld. Advocate based on the appeal memorandum and written submissions inter alia submit as under:
i. The appellant uses iron, coal, dolomite, mobil, greases, etc., as raw materials for the manufacture of Sponge Iron. The appellant avails cenvat credit of service tax paid on various input services.
ii. During the course of manufacture of Sponge Iron, some quantity of unburnt/partially burnt coal emerges, known as Char. This Char, when reacts with dolomite results in Dolochar.
iii. Part of Char/Dolochar is used by the appellant in their captive Power Plant and part is sold outside at negligible price (used for land fill).
iv. It is the case of the Department that Char/Dolochar are being captively removed to their Power Plant without payment of excise duty under exemption notification No. 67/95-CE, dated 16.03.95. Thus Char/Dolochar being exempted excisable products, the appellant cannot avail cenvat credit on mobil, grease, etc. which go into the manufacture of Char/Dolochar, in terms of rule 6(1) of the Cenvat Credit Rules, 2004.
v. Hence demands were confirmed u/r 6 of the Cenvat Credit Rules, 2004 r/w section 11A of the Central Excise Act, 1944. Penalties were also imposed.
3.1The Ld. Advocate further submits as under:
i. That Char/Dolochar are not manufactured goods stands upheld by the Commissioner (Appeals) and this order has attained finality in so far as the Department is concerned. That Char/Dolochar are not manufactured has also been held by the Tribunal in their own case (the appellant were earlier known as M/s HEG Ltd.) vide Final Order Nos. 307-310/2004-NB(C), dated 10.04.2004, which has been referred to in HEG Ltd. vs. CCE, Raipur [2013 (290) ELT 676 (Tri.-Del)]. If goods are not manufactured, no duty of excise is leviable thereon. Further, if no duty of excise is leviable on Char/Dolochar, these cannot be exempted under section 5A of the Central Excise Act, 1944 as only those goods can be exempted which are chargeable to duty of excise. No duty of excise is payable on Char/Dolochar.
ii. If Char/Dolochar are not manufactured goods, the change from 10.05.2008 in the amended definition of excisable goods (given below) would still not render the goods as being subject to duty of Excise. Thus even from 10.05.2008 onwards, Char/Dolochar are still not excisable goods.
iii. As stated above, Char/Dolochar are not exempted goods. When part of these goods is removed without paying any excise duty to the Power Plant, these are not removed under any exemption. Not being exempted goods, the removal of Char/Dolochar to their Power Plant is not hit by the provisions of Rule 6(1) of the Cenvat Credit Rules, 2004. In view of this, the demands under the impugned Order are not sustainable.
4. The Ld. AR has reiterated the findings given in the impugned orderd.
5. After careful consideration of facts of the case, the submissions of both the sides and the case laws cited it appears that the subject matter is covered by Tribunals decision in the case of HEG Ltd. (supra) where the Tribunal observes as under:
2. The Revenues contention is that the said dolochar is specified item against entry No. 2621 90 00 of the Central Excise Tariff though attraction nil rate of duty. As such, the same has to be treated as exempted excisable product. On the other hand, it is the appellants contention that dolochar arises as a residue/refused and not a manufactured product, in which case the provision of Rule 6(3)(b) would not apply. Reliance has also been placed on the earlier decision of the Tribunal in the same appellants case, being Final Order Nos.- 307-310/20040-NB (C), dated 19-04-2004 holding that dolochar is not legally assessable to duty as the same cannot be held to be a manufactured product.
3. Though we note that inclusion of the said product under the tariff is subsequent to the decision to the above decision of the Tribunal in the same appellants case, but keeping in view the findings arrived at by the Tribunal that dolochar cannot be held to be a manufactured item, by following the earlier decision of the Supreme Court in the case of Ahmedabad Electricity Company Ltd. [2003 (158) ELT 3 (S.C.)], we hold that the appellant has been able to make out a prima facie case in its favour as it is well settled that the entry of particular product in the tariff by itself would not satisfy the definition of manufacture as appearing in Section 2(f) of the Central Excise Act.
[Emphasis Supplied] 5.1. In the light of above observations and by following the Honble Supreme Courts decision in the case of Union of India Vs. Ahmedabad Electricity Co. Ltd. 2003 (158) E.L.T. (S.C.) and CESTAT decision in the case of Vishal Pipes Vs. Commissioner of Central Excise, Noida 2010 (255) E.L.T. 532 (Tri.-Delhi) we are of the considered view that the items Char/Dolchar are not manufactured or excisable goods. Therefore, the impugned order is not sustainable and is hereby set aside.
6. In the result the appeals are allowed with consequential relief to the appellant.
[Pronounced in open Court on 19.12.2016] (Justice (Dr.) Satish Chandra) President (Ashok K. Arya) Member (Technical) NK Page 4 of 4 E/55894,55895,55896 & 55897/2013-EX [DB]